The demographic deficit: How aging will reduce global wealth

To fill the coming gap in global savings and financial wealth, households and governments will need to increase their savings rates and earn higher returns on the assets they already have.

The world's population is aging, and as it gets even grayer, bank balances will stop
growing and living standards, which have improved steadily since the industrial
revolution, could stagnate. The reason is that the populations of Japan, the United States,
and Western Europe, where the vast majority of the world's wealth is created and held,
are aging rapidly (Exhibit 1). During the next two decades, the median age in Italy will
rise to 51, from 42, and in Japan to 50, from 43. Since people save less after they retire
and younger generations in their prime earning years are less frugal than their elders
were, savings rates are set to fall dramatically.